A ceasefire proposal emerges between the US and Iran, but risks to the energy and shipping supply chain remain unresolved

Iran has received a 10-day ceasefire proposal, but U.S. President Trump has warned Iran that it will pay the price if U.S. troops are killed. The Strait of Hormuz and Bab-el-Mandeb Strait are facing risks; Bab-el-Mandeb concerns the export of 4.9 million barrels per day of Saudi crude oil via the Red Sea. Black Sea CPC oil terminal operations have halted, obstructing energy and grain supplies. Former New York Fed President Dudley believes rising energy prices are increasing rate hike pressure, while Morgan Stanley expects interest rates to remain unchanged for the entire year. U.S. money market funds, managing over $8 trillion in assets, are shortening duration and increasing holdings of overnight repos and floating-rate bonds. The market is focusing on the response to the 10-day ceasefire proposal, Houthi actions against Saudi vessels, and the recovery of the CPC terminal.